Legislature(2017 - 2018)SENATE FINANCE 532

05/16/2017 01:30 PM Senate FINANCE

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05:53:54 PM Start
05:54:56 PM HB132
06:20:00 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Meeting Postponed to 5:50 p.m. --
Moved CSHB 132(L&C) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
CS FOR HOUSE BILL NO. 132(L&C)                                                                                                
     "An  Act relating  to transportation  network companies                                                                    
     and   transportation  network   company  drivers;   and                                                                    
     providing for an effective date."                                                                                          
5:54:56 PM                                                                                                                    
LAURA STIDOLPH,  STAFF, REPRESENTATIVE ADAM  WOOL, explained                                                                    
that HB  132 allowed transportation network  companies (TNC)                                                                    
to   operate   in   Alaska  by   clarifying   the   workers'                                                                    
compensation act by exempting  TNC drivers. She reviewed the                                                                    
Sectional  Analysis  for version  I  of  the bill  (copy  on                                                                    
     Section 1: Describes legislative  intent of the bill is                                                                    
     to  clarify the  Alaska Workers'  Compensation Act  and                                                                    
     its  relationship  to  transportation  network  company                                                                    
     drivers. No difference.                                                                                                    
     Section  2:  Offers  immunity to  the  state  if  civil                                                                    
     action  is  taken   against  a  transportation  network                                                                    
     company. No difference.                                                                                                    
     Section  3: Amends  AS 21.96  by adding  a new  section                                                                    
     21.96.018  relating to  transportation network  company                                                                    
     insurance provisions.  Allows for  automobile insurance                                                                    
     writers to  exclude any driver  who is logged  onto the                                                                    
     digital network of a  transportation network company or                                                                    
     while a driver provides a ride. No difference.                                                                             
     Section   4:   Amends   AS  23.30.230(a)   to   exclude                                                                    
     transportation network company  drivers from the Alaska                                                                    
     Workers' Compensation Act. No difference.                                                                                  
     Section  5:  Amends  AS   23.30.230(c)  by  adding  the                                                                    
     definitions for "digital  network," "prearranged ride,"                                                                    
     "transportation  network company,"  and "transportation                                                                    
     network company driver." No difference.                                                                                    
     Section  6:  Amends AS  28  by  adding a  new  chapter,                                                                    
     Chapter  23,   Transportation  Network   Companies  and                                                                    
     Drivers. AS  28.23.010. Relates  to fares  collected by                                                                    
     transportation  network  companies   for  services.  No                                                                    
     difference.   AS   28.23.030.  Governs   identification                                                                    
     required  for   transportation  network   vehicles  and                                                                    
     drivers.   No   difference.  AS   28.23.040.   Requires                                                                    
     electronic receipts. No  difference. AS 28.23.050. Sets                                                                    
     insurance   requirements  for   transportation  network                                                                    
     companies and drivers. No difference.                                                                                      
5:58:08 PM                                                                                                                    
Senator Micciche asked about the "no difference" language.                                                                      
Co-Chair MacKinnon explained that the bill was a companion                                                                      
bill and the comparison was between the two pieces of                                                                           
5:59:08 PM                                                                                                                    
Ms. Stidolph continued addressing the Sectional Analysis:                                                                       
     AS    28.23.060.   Requires    transportation   network                                                                    
     companies to  provide automobile  insurance disclosures                                                                    
     to drivers. No difference.                                                                                                 
     AS  28.23.070.  Requires  that  transportation  network                                                                    
     companies to  file a certificate of  insurance with the                                                                    
     division of insurance. No difference.                                                                                      
     AS  28.23.080.  Provides  that  transportation  network                                                                    
     companies  are  not  employers  and  that  drivers  are                                                                    
     independent  contractors, not  employees. Exempts  this                                                                    
     section if  TNC is  owned or operated  by the  state, a                                                                    
     municipality, a  federally recognized tribe,  or entity                                                                    
     that is  exempt from  federal taxation under  26 U.S.C.                                                                    
     501(c)(3)  (Internal  Revenue  Code).  Added  language.                                                                    
     This  change was  by request  of the  US Department  of                                                                    
     Labor, Employment  and Training Administration,  to the                                                                    
     Alaska  Department of  Labor and  Workforce Development                                                                    
     for  conformity  to Federal  unemployment  compensation                                                                    
     (UC)  law. In  order to  preserve the  tax credits  now                                                                    
     available  to Alaska  employers, this  provision needed                                                                    
     to  be   added  to  make   it  clear  that   the  state                                                                    
     unemployment  tax must  be paid  for  all employees  of                                                                    
     state and  local governments,  Indian tribes,  and non-                                                                    
     profit organization. Any  exclusion from the definition                                                                    
     of employment must not apply to these entities.                                                                            
     AS   28.23.090.   Requires   implementation   of   zero                                                                    
     tolerance drug and alcohol policy. No difference.                                                                          
     AS  28.23.100.  Sets   transportation  network  company                                                                    
     driver  requirements.   Requires  local   and  national                                                                    
     criminal  background   check,  multi-state   or  multi-                                                                    
     jurisdiction criminal records locator,  the US Dept. of                                                                    
     Justice  National Sex  Offender public  website (driver                                                                    
     is  disqualified  if  they are  listed  on  this),  and                                                                    
     obtaining  a  driver  history  report.  Disqualifies  a                                                                    
     driver  if  in the  past  seven  years they  have  been                                                                    
     convicted  of: an  unclassified,  class A,  or class  B                                                                    
     felony;  a   DUI  while  operating  a   motor  vehicle,                                                                    
     watercraft,  or  aircraft;  refusal   to  submit  to  a                                                                    
     chemical test;  a violent crime  against a  person; not                                                                    
     rendering assistance after  an accident. Disqualifies a                                                                    
     driver if  in the  past three years  if they  have been                                                                    
     convicted  of   or  forfeited  bail  for   a  third  or                                                                    
     subsequent moving  traffic violation or  been convicted                                                                    
     of: driving without  a license; failure to  stop at the                                                                    
     direction of  a police  officer; reckless  or negligent                                                                    
     driving.  Added   and  amended  language.   Cleaned  up                                                                    
     language in  the three year driving  history look-back,                                                                    
     and seven  year criminal history look-back  that was in                                                                    
     SB14.  The language  that passed  the  Senate was  very                                                                    
     restrictive and  would have prohibited someone  who was                                                                    
     found guilty  of shoplifting to  drive for a TNC.  If a                                                                    
     person has committed a violent  crime, either felony or                                                                    
     misdemeanor,  in  the past  seven  years  they may  not                                                                    
     drive  for a  TNC.  A conviction  of any  unclassified,                                                                    
     class A, or class B felony  in the past seven year will                                                                    
     also disqualify a person as  a driver. The new language                                                                    
     makes it  clear that  a driver on  the US  DOJ National                                                                    
     Sex Offender list  may not drive for a TNC.  Also, if a                                                                    
     person  has   been  convicted  of  driving   under  the                                                                    
     influence while  operating a  vehicle or  watercraft in                                                                    
    the past seven years they may not drive for a TNC.                                                                          
     Driver must  be 21 years  of age. Added  language. This                                                                    
     change was made due  to state statute regarding alcohol                                                                    
     and marijuana, so  if either substance was  left in the                                                                    
     car after  a rider had disembarked  the driver wouldn't                                                                    
     be breaking  state law  by being  in possession  due to                                                                    
     being underage.                                                                                                            
     Driver  may not  solicit  a rider  or  accept a  street                                                                    
     hail, may  only provide a prearranged  ride through the                                                                    
     TNC  platform,  or  solicit or  accept  cash  payments.                                                                    
     Added language.  The final language in  this subsection                                                                    
     was  added to  make  clear that  TNC  drivers may  only                                                                    
     accept  rides  from  the  TNC  platform,  they  do  not                                                                    
     operate  like  other  for-hire vehicles  by  soliciting                                                                    
     riders or accepting street hails,  and that the payment                                                                    
     is through  a cashless system. Payment  in this section                                                                    
     does not include tips, which can be cash.                                                                                  
6:02:39 PM                                                                                                                    
Ms. Stidolph continued to address the Sectional Analysis:                                                                       
     AS  28.23.105  19-point   safety  inspection  required.                                                                    
     Driver's car may not be  older than 12 years old. Added                                                                    
     language.  This language,  which is  standard terms  of                                                                    
     services for  major companies like  Uber and  Lyft, was                                                                    
     added to statute so that  every TNC operating in Alaska                                                                    
     will be held to a  high standard for vehicle safety and                                                                    
     AS 28.23.110.  Relates to mandatory rules  and policies                                                                    
     governing    non-discrimination    and    accessibility                                                                    
     protected under AS 18.80.210. No difference.                                                                               
     AS  28.23.120.  Provides  for maintenance  of  records.                                                                    
     Changed from one year of recordkeeping to two years.                                                                       
     AS  28.23.030.  The   Department  of  Transportation  &                                                                    
     Public  Facilities may  under  AS 02.15,  enter into  a                                                                    
     contract, lease,  or other arrangement  with a  TNC for                                                                    
     use of  an international  airport owned or  operated by                                                                    
     the state. The  Department of Transportation approached                                                                    
     the sponsor  about this revision  which will  allow for                                                                    
     DOT  to   enter  into  a   contract,  lease   or  other                                                                    
     arrangement  with  TNCs  at Ted  Stevens  International                                                                    
     Airport and Fairbanks International Airport.                                                                               
     AS 29.23.180. Provides definitions  for the chapter. No                                                                    
     AS  28.23.190  States  that  the  short  title  of  the                                                                    
     chapter  may be  cited as  the "Transportation  Network                                                                    
     Companies Act." No difference.                                                                                             
6:04:17 PM                                                                                                                    
Ms. Stidolph addressed the remaining sections of the                                                                            
Sectional Analysis:                                                                                                             
     Section 7:  Amends AS 29.10.200 to  add paragraph (66),                                                                    
     adding  AS  29.35.148   (regulation  of  transportation                                                                    
     network company  or drivers) as home  rule prohibitions                                                                    
     on acting otherwise. No difference.                                                                                        
     Section  8: Amends  AS 29.35  by  adding AS  29.35.148,                                                                    
     which   provides  that   the   authority  to   regulate                                                                    
     transportation  network  companies  and  transportation                                                                    
     network  drivers is  reserved  to  the state.  Provides                                                                    
     that  an imposition  of a  municipal sales  tax may  be                                                                    
     applied to  a trip  originating in the  municipality on                                                                    
     TNC  drivers.  Municipal  traffic  ordinances  must  be                                                                    
     followed. Municipalities  may by ordinance  ratified by                                                                    
     the  voters in  a regular  municipal election  prohibit                                                                    
     TNCs  from   conducting  activities.   Added  language.                                                                    
     Allows for municipalities to impose  a sales tax on the                                                                    
     TNC driver.  Ensures that municipal  traffic ordinances                                                                    
     must be followed. Allows for  local-opt out with a vote                                                                    
     of the people in a general election.                                                                                       
     Section  9:  This  Act  takes  effect  immediately.  No                                                                    
6:05:35 PM                                                                                                                    
Senator  Micciche  had  a   difficult  time  believing  that                                                                    
Section 8 was enforceable. He  asked Ms. Stidolph to provide                                                                    
greater detail  and background regarding  the sales  tax. He                                                                    
gave  the  example   of  a  ride  that   begins  within  the                                                                    
municipality and ends outside the jurisdiction.                                                                                 
Ms. Stidolph  articulated that the  bill sponsor  had spoken                                                                    
with the  major companies  involved in the  legislation. She                                                                    
specified  that  it  was   possible  through  technology  to                                                                    
identify  where the  trip originated  and apply  appropriate                                                                    
Senator Micciche  asked if the  language clarified  that the                                                                    
point of origin defined the taxability of the fare.                                                                             
Ms. Stidolph referred to page 14, line 7 of the bill:                                                                           
     ...company driver that taxes  a trip originating in the                                                                    
     municipality  in the  same manner  that other  services                                                                    
     are taxed in the municipality;                                                                                             
6:07:36 PM                                                                                                                    
Vice-Chair  Bishop  referred  to   a  section  requested  by                                                                    
Department  of Transportation  and Public  Facilities (DOT).                                                                    
He  asked whether  the department  had indicated  the reason                                                                    
for its request.                                                                                                                
Ms.  Stidolph considered  that the  primary concerns  of the                                                                    
department had  pertained to  the Ted  Stevens International                                                                    
Airport and controls over the traffic flow in the area.                                                                         
Vice-Chair Bishop  stated he would  follow up  directly with                                                                    
the department.                                                                                                                 
6:08:35 PM                                                                                                                    
Senator Hughes  stated she was  an early adopter  of network                                                                    
services. She thought  that transportation network companies                                                                    
would be very  popular with people from the  Palmer area and                                                                    
wanted to  ensure that  they could be  dropped off  close to                                                                    
the airport.                                                                                                                    
Ms. Stidolph  thought that DOT  had not been  concerned with                                                                    
regulating the  network. The language  was done so  that the                                                                    
department  could have  some amount  of control  but not  to                                                                    
restrict it.                                                                                                                    
Co-Chair  MacKinnon  asked  Vice-Chair Bishop,  as  the  DOT                                                                    
operating budget  subcommittee to enquire  regarding Senator                                                                    
Hughes'  question.  She  mentioned  Senator  Mia  Costello's                                                                    
legislation regarding similar  transport services. She asked                                                                    
Vice-Chair Bishop  to speak with the  commissioner on behalf                                                                    
of the committee to supply the relative regulations.                                                                            
6:11:15 PM                                                                                                                    
Senator Micciche  referred to page  14, "a  municipality may                                                                    
by ordinance ratified  by the voters in  a regular municipal                                                                    
election  prohibit  transportation  network  companies  from                                                                    
conducting   activities   under    AS   28.23   within   the                                                                    
municipality." He  asked whether that included  the terminus                                                                    
of  the trip  or  whether  the service  could  enter into  a                                                                    
municipality that chose not to have those services.                                                                             
Ms. Stidolph believed  that a driver could  drop a passenger                                                                    
within the municipality, but could not pick up a driver.                                                                        
Senator Micciche thought it broke  out the sales tax but not                                                                    
the example  of a  drop-off within  a municipality  that did                                                                    
not allow those services.                                                                                                       
Co-Chair MacKinnon thought Senator  Micciche had made a good                                                                    
point, and suggested  that point of origin  versus the drop-                                                                    
off point  could be  handled in  regulation. She  thought it                                                                    
would be helpful to have a  legal opinion on the matter. Her                                                                    
understanding was that  a trip could be dropped  off but not                                                                    
picked up  within a  municipality that  did not  allow those                                                                    
6:13:53 PM                                                                                                                    
Co-Chair MacKinnon  explained that Senator Mia  Costello had                                                                    
a companion bill currently in the House Rules Committee.                                                                        
SENATOR  MIA COSTELLO,  remarked  that her  position on  the                                                                    
bill remained  unchanged from  her earlier  testimony before                                                                    
the committee.                                                                                                                  
ANNA  LATHAM,   DEPUTY  DIRECTOR,  DIVISION   OF  INSURANCE,                                                                    
DEPARTMENT OF COMMERCE,  COMMUNITY AND ECONOMIC DEVELOPMENT,                                                                    
discussed  the  fiscal  notes.  She  communicated  that  the                                                                    
Division of Insurance had submitted  a zero fiscal note. She                                                                    
explained  that  there  had   been  no  substantive  changes                                                                    
between the [companion] Senate Bill [SB 14] and HB 132.                                                                         
Vice-Chair Bishop discussed that  FN2 from the Department of                                                                    
Labor and Workforce Development,  (OMB component number 344)                                                                    
was a zero fiscal note.                                                                                                         
Vice-Chair  Bishop  MOVED to  report  CSHB  132(L&C) out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
CSHB  132(L&C) was  REPORTED  out of  committee  with a  "no                                                                    
recommendation"  and  with  two  previously  published  zero                                                                    
fiscal notes: FN1 (CED) and FN2 (LWF).                                                                                          
6:17:06 PM                                                                                                                    
AT EASE                                                                                                                         
6:19:15 PM                                                                                                                    
Co-Chair MacKinnon reviewed the next day's calendar.                                                                            

Document Name Date/Time Subjects
SB14 ver I.A to CS for HB132 ver I Explanation of Changes.pdf SFIN 5/16/2017 1:30:00 PM
HB 132
SB 14